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The order battle between Boeing (NYSE: BA) and Airbus (OTCPK:EADSFOTCPK:EADSY) is one way for the companies to flex their muscles, next to marketing their respective products as the best solution with the highest fuel efficiency and passenger comfort. Even though the orders (in terms of value) are in no way a reflection of financial performance, it’s important to have a look at the order inflow. That’s because the order tallies give a nice impression of which manufacturer has the best mix of discount, comfort, slot availability and efficiency and it gives an idea of the overall health of the aircraft market and appetite for new aircraft.

In this report, AeroAnalysis will look at the order inflow during May for both manufacturers and their role in the narrow and wide body markets.

Overview for May

Airbus and Boeing together hauled in 68 gross orders in May compared to 72 orders in the same month last year. Looking at the division of the orders in May, we’d mark Boeing as the winner as it logged 43 orders versus 25 for Airbus. In terms of value, Boeing received $4.2B worth of orders versus $2.8B for Airbus.

In May, Boeing booked 43 gross orders, 19 wide body jets and 24 single aisle aircraft:

  • BOC Aviation ordered 3 Boeing 787-9.
  • Lufthansa (OTCQX:DLAKF) ordered 2 Boeing 777Fs for Lufthansa Cargo and 2 Boeing 777-300ER for Swiss International Air Lines.
  • Qantas (OTCPK:QUBSF) finalized an order for 6 Boeing 787-9s replacingthe Boeing 747-400 in the fleet.
  • The US Navy ordered 10 P-8A Poseidons.
  • Three unidentified customers ordered 2, 5 and 14 Boeing 737 MAX aircraft respectively.
  • Two unidentified customers ordered 1 Boeing 787-8 each.
  • One unidentified customer ordered 4 Boeing 787-9s.

The full report on Boeing’s orders and deliveries in May can be read here.

In May, Airbus booked 25 gross orders, 16 wide body jets and 9 single aisle aircraft:

  • Lufthansa (OTCQX:DLAKF) ordered 3 Airbus A320ceo and 6 Airbus A320neo aircraft.
  • There was 1 intra-company sale of an Airbus A330-200.
  • An undisclosed customer ordered 15 Airbus A350-900 aircraft.

The full report on Airbus’s orders and deliveries in May can be read here.

May was not a month with a big order inflow, but Boeing and Airbus both received orders for their wide body aircraft which is a good thing as the wide body programs could use the orders better than the single-aisle programs.

For Airbus, it has been challenging to accumulate wide body orders as they come in flocks instead of a more continuous stream but this is partly caused by the Airbus A350 going through the first cycle of filling orders and the Airbus A330neo has yet to enter commercial service. During the month, we saw 15 orders for the Airbus A350 program.

Overview Year-to-date

Figure 1: Infographic May 2018

Airbus received 50 cancellations in the first 5 months, leaving the jet maker with 111 net orders. Boeing received 376 orders and 70 cancellations in the first 5 months of 2018, bringing its net orders to 306. Looking at the net orders, Boeing is having a strong lead over Airbus but this of course doesn’t say a lot since a few big orders can completely change the game as we saw last year. It will be very interesting to see how many orders both jet makers materialize until and during the Farnborough Airshow later this year.

In the first 5 months of the year Airbus booked more gross orders compared to last year when it booked it 110 gross orders, netting 73 orders compared to 151 this year. Boeing saw its orders inflow improve in the first 5 months; gross orders increased from 254 to 376, while cancellations increased from 46 to 50 marking a strong net improvement.

Conclusion

Boeing and Airbus both will be happy with the order inflow in the first 5 months. Neither jet maker does really face imminent difficulties if its new aircraft program would suffer from a soft year, since risk has already been mitigated previously. The single aisle programs are in good shape when looking at the backlog where continued order inflow play an important role on decisions for future hikes in production rates while order inflow for the wide body jets will help keep production at sustainable levels with the possibility of higher production rates as replacement cycles boost the required delivery profiles in the coming years.

Boeing is having a strong lead, but. Both jet makers can turn the battle around in just one month as Airbus portrayed last year. We’d expect to be able to see some clear headings after the Farnborough Airshow that will take place in July. What is interesting is that Boeing is expecting moderated order inflow, which is a rather vague term while Airbus expects to maintain a book-to-bill of 1. This is not necessarily an indication that Boeing expects to book less orders since it produces more aircraft than Airbus, but it seems that Boeing is more cautious about their ability to accumulate orders in 2018. From what we’re seeing so far we’d expect a better year in terms of order inflow as well as commercial aircraft deliveries.

What holds for both manufacturers is that they are oversold on their single aisle programs and there is the possibility to hike production rates beyond levels currently announced, though the supply chain and especially the supply chain of the propulsion systems should be stress tested thoroughly and this might delay a rate hike somewhat.

Overall, we remain positive on the commercial aircraft market and ability for both jet makers to benefit from this growing market.